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Revisiting the Poverty Rate: New Measure Shows Less Inequality

By Jacqui Logan

A recent IWPR fact sheet, “A Clearer View of Poverty: How the Supplemental Poverty Measure Changes Our Perceptions of Who is Living in Poverty” by Jocelyn Fischer, examines the recently developed Supplemental Poverty Measure. The new measure—created in response to concerns about the adequacy of the official federal poverty measure—uses both post-tax income and federal in-kind benefits to assess the resources of families and individuals. The most salient aspect of the new measure is a more accurate poverty threshold. Each year, the new measure will be released along with the official measure by the Census Bureau and the Bureau of Labor Statistics.

IWPR’s fact sheet compares the poverty situation in America as described by the new Supplemental Poverty Measure to that described by the official measure, which takes into account only cash resources when determining income. IWPR’s analysis found two quite different pictures of poverty according to the two measures.

The overall poverty rate is higher under the Supplemental Poverty Measure (15.9 percent poor) than it is under the official poverty measure (15.1 percent poor). Moreover, IWPR’s analysis shows there is less inequality in poverty between different demographic groups under the Supplemental Poverty Measure than under the official poverty measure.

While both men’s and women’s poverty rates are higher under the Supplemental Poverty Measure, men’s poverty rate (14.1 percent under the official poverty measure and 15.2 percent under the supplemental measure) rises numerically and proportionately much more than women’s poverty rate (16.3 percent under the official measure and 16.6 percent under the supplemental measure), thus decreasing inequality between men’s and women’s poverty rates.

Similarly, there is less inequality by race/ethnicity under the Supplemental Poverty Measure than under the official measure. Furthermore, when compared wtih the official measure, the supplemental measure indicates less inequality in poverty between persons of different age groups and between the married and the unmarried.

Overall, use of the Supplemental Poverty Measure reveals a higher rate of poverty in the United States and changes perceptions of whom we consider poor.

For more information on IWPR’s research on poverty and its impact on women and families, please visit our website.

Jacqui Logan was a Research Intern with the Institute for Women’s Policy Research during the summer semester.